LONDON - The United States and Britain are reportedly set to announce a trade agreement on Thursday that could have implications for President Donald Trump’s tariffs campaign, but the scope of the deal could be limited.
The New York Times and Politico reported that the agreement would be with the UK, citing multiple people familiar with the plans, while the Wall Street Journal said it would be a “framework” of a deal.
It would be the first such trade agreement since Trump imposed sweeping tariffs on US trading partners on what he called “Liberation Day” on April 2.
The president slapped 10% tariffs on imports from around the world, including Britain, but he temporarily froze higher duties on dozens of nations to give space for negotiations.
Trump on Wednesday wrote that a “major trade deal” would be announced with a “big, and highly respected country”.
However, media and analysts said it was unclear whether a US deal with Britain had been finalised or if the two countries would announce a framework for an agreement that would be subject to further negotiation.
Trump is set to announce the “deal” at a news conference at 10am Washington time in the Oval Office at the White House, and touted it as the “first of many”.
In London, Downing Street said British Prime Minister Keir Starmer would give an “update” on trade talks with the United States on Thursday.
“Talks on a deal between our countries have been continuing at pace and the prime minister will update later today,” a spokeswoman said.
Starmer, who like Trump won power last year, had pushed for a trade deal before the president unleashed his tariffs blitz on Britain and countries worldwide.
Reaching a post-Brexit agreement with the United States has been the Holy Grail for Britain since it exited the European Union at the start of the decade.
London is keen to get some kind of accord with Washington, ahead of an EU-UK summit on May 19 where it hopes to reset ties with the 27-nation bloc.
A US-UK deal could prove problematic for the EU which is struggling to reach an acceptable trade deal of its own with the United States.
Britain this week struck a free-trade agreement with India, its biggest such deal since leaving the EU, after negotiations relaunched in February following US tariff threats.
The EU remains Britain’s biggest trading partner, while the United States is the UK’s single largest country trading partner.
Details of deal?
Trump has for weeks claimed that countries were lining up to strike trade agreements with the United States.
Reports have suggested that Washington may reduce certain tariffs on British products in exchange for relief from the UK’s digital services tax paid by US tech giants.
London had not retaliated against the Trump’s 10% tariff imposed on UK imports, nor to the higher 25% levies for steel, aluminium and the automotive sector.
“Any deal with the US is likely to be damage limitation rather than an economic boost,” Jonathan Portes, professor of economics at King’s College London, told AFP.
“That is, it is likely to limit the Trump tariffs, but … exporters will probably still be facing higher tariffs overall than they were last year.”
Deutsche Bank analyst Jim Reid said “given that full trade deals take years to negotiate, this will likely be a framework and it will be interesting to see whether the 10% baseline tariff stays as that will provide an important template for negotiations with other countries”.
The Bank of England is widely expected to cut its key interest rate by a quarter point Thursday as Trump’s planned tariffs threaten to weaken global economic growth.
Affinity for Britain
Starmer visited Washington at the end of February in part to discuss tariffs and came away hopeful that a long-awaited accord could be reached.
Trump at the time held out the prospect of a “great” deal, hailing Starmer as a tough negotiator.
Starmer during his visit handed Trump an invitation to meet King Charles III for an unprecedented second state visit that London hopes will boost transatlantic ties.
The 78-year-old Republican has long been a vocal fan of the British royal family.
He also has a close affinity to the UK as his mother was born in Scotland, where he owns a golf course.